By David Stanway and Charlie Zhu
BEIJING/HONG KONG, July 15 China aims to more
than quadruple solar power generating capacity to 35 gigawatts
by 2015 in an apparent bid to ease a massive glut in the
domestic solar panel industry.
The target has been stated previously by the State Grid,
which manages the country's electricity distribution, but now
has the official backing of the State Council, the country's
cabinet and its top governing body.
China will add around 10 GW per year from 2013-2015, the
State Council said in a statement.
If met the increase in solar power generation would benefit
not only domestic panel producers like Suntech Power Holdings Co
Ltd and LDK Solar Co Ltd, but also manufacturers
globally who have struggled against a flood of cheap Chinese
exports. Both Europe and the United States have launched
anti-dumping duties against China's solar panel exports.
But analysts are skeptical, citing a lack of funding for
solar subsidies and the absence of infrastructure required to
harness intermittent renewable energy.
"I think China can boost capacity to 21 GW but it would be
very difficult to reach 35 GW," said Jason Cai, chief analyst at
Shanghai-based consultancy Solarzoom.
China's manufacturing capacity, the world's largest, is
about 45 GW versus global demand of 35 GW estimated for this
year, industry figures show. Domestic installed solar power
generating capacity stood at just eight GW at the end of 2012.
The sector has been hit hard by the excess capacity, falling
government subsidies and trade disputes. Manufacturers have been
hemorrhaging cash and struggling with mounting debts as panel
prices fell by two thirds over the past couple of years.
The U.S. last year slapped anti-dumping duties on solar
cells imported from China. The EU, which accounts for half of
global demand, has also imposed duties that will jump to
punitive levels next month.
The State Council also urged banks to continue lending to
large and efficient solar panel producers, and said it would
strive to improve pricing and subsidies in order to boost solar
power production and consumption. It gave no details.
China's dominant power distributor State Grid Corp has been
holding back from purchases of electricity from wind and solar
farms due in part to concerns that the intermittent sources
would disrupt its networks.
It has also been struggling to transmit power from renewable
energy generating centres in the northwest, north and northeast
to population hubs in the south and east due to a lack of a
comprehensive high-voltage and smart grid.